With the energy sector down across the board Thursday, and other sectors following suit, the markets close in the red once again, after posting significant early losses following Wednesday’s market selloff.
The S&P 500 closed down 6.21 points (0.21%) at 2,917.52, the Dow closed down 122.35 points (0.46%) at 26,307.79 and the Nasdaq closed down 12.87 points (0.16%) at 8,036.77.
Despite efforts to buoy oil markets, WTI crude oil was off by nearly 4% Thursday, breaking through an important technical support level. Crude futures fell off rapidly despite an uptick in geopolitical concerns, including unrest in Venezuela and the US-backed attempts aimed at driving Iran’s crude exports to zero.
“The market is a little bit spooked that we might have a repeat of last year, where there are all these bullish factors on the supply side globally, but U.S. shale [oil]is just this big behemoth in the background,” said Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions on CNBC.
Investors looking to take advantage of the volatility in oil could look at SPDR S&P Oil & Gas Exploration & Production ETF (XOP), Vanguard Energy ETF (VDE), iShares Global Clean Energy ETF (ICLN), Invesco DWA Energy Momentum Portfolio ETF (PXI), Energy Select Sector SPDR Fund (XLE), or iShares U.S. Oil & Gas Exploration & Production ETF (IEO).
Real estate, health, and financials were the only market sectors up today, while Technology, Energy, Consumer Staples, and Consumer Discretionary all closed down on the day, leaving bulls battered and bruised after the selloff following the FOMC announcement yesterday.
Vanguard Real Estate Index Fund (VNQ), up over 17% YTD, or Health Care Select Sector SPDR Fund (XLV) are good funds to take advantage of the green sectors in the market today.
CFRA’s Sam Stovall saw stocks hitting all-time highs before April ended. Stovall warned on CNBC that a “sell in May and go away” phenomenon is unfolding. “The market could end up attempting to digest some of the gains that it’s already experienced,” the firm’s chief investment strategist said Tuesday on CNBC’s “Futures Now.”
Despite the market reaching all-time highs yesterday, this rally continues to be unpopular with many investors, who buck the trend, driving prices higher. Perhaps their day in the sun will come finally.
Still, Stovall is skeptical that a total market reversal will be imminent: “The strength in the market early in the year combined with what normally happens after a very strong beginning to the year implied that we will be up for the year,” Stovall said. “We’ll be good in November and December.”
Stovall said his S&P 500 year-end target is 2,975, just 1 percentage point over all-time highs.